Ferrous scrap recyclers in North America fortunate enough to have tonnage available for the export market are likely to continue to have interested trading partners in Turkey.

Speaking to attendees at the Middle East Metals Recycling Conference in early March, Serhat Babac of Turkey-based information company SteelOrbis reported that his home nation continues to serve as “the biggest [ferrous] scrap importer in the world.”

Although Turkey is only the eighth largest steel producing nation in the world, noted Babac, some 74 percent of its steel is produced in electric arc furnaces (EAFs). Even though China now produces an incredible 700-plus million tons of steel per year, that nation’s EAF steelmaking rate of just 10 percent causes it be less scrap dependent.

Babac pointed out that in 2012 Northern Europe was the leading provider of ferrous scrap to Turkey (8 million tons), but North America was a reasonably close second with 6.8 million tons.

The region coming in third, with 5.4 million tons, is defined by SteelOrbis as the Black Sea region, consisting largely of nations from the former Soviet Union. That figure is lower than in some previous years.

Regarding prospects for Turkey to continue to need scrap from North America in 2013, Babac reported that to be likely, especially since SteelOrbis foresees that the Black Sea region “will decline even more” as a scrap source, owing to a combination of a depleted scrap reservoir and export tariffs that will tighten supplies from Russia and its neighbors.

As well, for much of this young decade a weak U.S. dollar had made American scrap attractive to Turkish buyers. As of mid-March, the value of the dollar was firming up against the euro and some other currencies, a development likely to be watched closely by Turkish mill buyers and American scrap shippers alike.

Babac also indicated the government and steel industry in Turkey have made it “a big priority to collect as much scrap as possible,” a development he says has resulted in “a huge increase in domestic supply.”

In the U.S. Midwest, demand from domestic steel buyers and an early March snowstorm combined to provide a boost to ferrous scrap prices in the March buying period.

American Metal Market (AMM) reported in March that mills buying from the Chicago area paid some $40 per ton more for prompt grades in March compared with February prices and some $30 or more per ton for shredded and No. 1 heavy melt grades.

Dealers were able to use the potential of weather-related tight supplies as a point of negotiation, AMM reported, though most dealers say supply remains legitimately tight. Operators of feeder yards to super-sized shredder yards continue to point to stiff competition to feed processing capacity and an ongoing lack of construction and demolition generated scrap.

The price increases in the Midwest lifted the value of scrap back above $400 per ton for most grades. AMM reported that mill buyers in the South did not, on average, pay the same increases in early March, though dealers were able to secure about $30 per ton more.

Figures from the American Iron and Steel Institute (AISI), Washington, D.C., for the week ending March 9, 2013, do not paint a picture of a resurgent domestic steel industry.

During that week, raw steel production in the United States was 1.83 million net tons with a capacity utilization rate of 76.3 percent. Just the week before, nearly 1.86 million tons of steel were produced, meaning output declined by 1.6 percent week to week.

Comparing the week of March 9, 2013, with the first full week of March one year ago, output declined 7.8 percent, from 1.98 million tons.

Economic indicators and data continue to point to the construction industry as the laggard in scrap generation and as a market for new steel.

The automotive industry in 2013 appears to be on track for another year of rebounding sales and production. Automotive industry analyst Mike Wall of IHS Global Solutions, Englewood, Colo., said in a speech that new passenger vehicle sales were continuing to climb steadily, heading toward 17.5 million units in 2016.

According to a report of Wall’s presentation on the M Live Media Group website, www.mlive.com, should sales reach the 17.5 million mark, it will be the first time since 2000. The low point of automotive sales in the U.S., Wall said, was 10.4 million units in 2009.

The related increases in scrap generation and steel output resulting from this 68 percent increase over seven years will not be felt the same in all regions of the country, according to Wall.

Whereas in 2000, 25 percent of North America’s vehicles were made south of Ohio, by 2016 that figure will have climbed to 50 percent.

*FOB New York, in metric tons; **FOB Los Angeles, in metric tons. The American Metal Market (AMM) Midwest Ferrous Scrap Index and the AMM Ferrous Scrap Export Indices are calculated based on transaction data received that are then tonnage-weighted and normalized to produce a final index value. The AMM Scrap Index includes material that will be delivered within 30 days to the mill. Spot business included after the 10th of the month will not be included. The detailed methodologies are available at www.amm.com/pricing/methodology.html. The grades are based on the Institute of Scrap Recycling Inc. (ISRI) specifications from 2012.